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Hold Harmless and Indemnification vs Additional Insured: Why You Need Both

By SubCover HQ · Updated Nov 1, 2026 · 3 min read

Most subcontracts and vendor agreements include two risk transfer tools that sound like the same thing: a hold harmless and indemnification clause, and a requirement to name you as an additional insured. They're different promises from different parties, and each one covers gaps in the other.

Indemnification: a promise from the sub

An indemnification (hold harmless) clause is a contract promise from the sub or vendor to cover certain losses, such as claims, defense costs, and damages, that arise from their work. It's only as good as two things: the wording, and the sub's ability to pay. A small sub with a strong indemnity clause and no money behind it can't actually make you whole.

Additional insured: rights under the sub's policy

Additional insured status gives you your own rights under the sub's liability policy, usually through an endorsement like CG 20 10 (ongoing operations) and CG 20 37 (completed operations). If a claim falls within that coverage, the sub's insurer can defend and pay for you directly, often without waiting to resolve who was at fault under the contract. See additional insured endorsements explained.

How they work together

• Indemnity can reach beyond insurance. It may cover losses the policy excludes or amounts above the policy limits, if the sub has assets.
• Insurance funds the promise. Many general liability policies include contractual liability coverage for an "insured contract," which can help pay the sub's indemnity obligation to you.
• Additional insured status is faster. You can tender a claim directly to the sub's insurer as an insured, instead of only pursuing the sub under the contract.
• Each one backs up the other. If an endorsement is missing or narrow, the indemnity clause is still there. If the indemnity clause is limited by state law, the additional insured coverage may still respond.

Watch out for state anti-indemnity laws

Many states limit how far a construction indemnity clause can go, especially clauses that try to make a sub cover losses caused by the indemnified party's own negligence, and some states apply similar limits to additional insured requirements. The rules vary widely by state and type of project, so have your attorney review your indemnity language for the states where you work rather than copying a clause from another contract.

What to check on your paperwork

• The subcontract or vendor agreement has both an indemnity clause and written insurance requirements, including additional insured status.
• The certificate shows you as additional insured on the right lines, and you have the endorsement copy, not just a checked box.
• The endorsement covers completed operations when your contract requires it.
• Your exact legal name, and the owner's where required, appear on the endorsement or fall within a blanket endorsement's wording.
• The coverage is primary and noncontributory if your contract says so. See primary and noncontributory explained.

Need a starting point for the insurance side? Our free insurance requirements generator drafts a requirements exhibit you can hand to your attorney and your subs.

Frequently asked questions

Is a hold harmless clause enough without additional insured status?

Usually not. Indemnity is only as strong as the sub's ability to pay. Additional insured status gives you direct rights under their insurance policy.

Is additional insured status enough without an indemnity clause?

It leaves gaps. Indemnity can cover losses outside the policy or above its limits, and contractual liability coverage can help fund it.

Are indemnity clauses enforceable in every state?

No. Many states have anti-indemnity laws that limit construction indemnity clauses, especially for the indemnified party's own negligence. Have your attorney review your contracts.

What is an insured contract?

It's a defined term in many general liability policies. Contractual liability coverage for an insured contract can help pay a sub's indemnity obligation to you, subject to the policy terms.

This guide is general information, not insurance or legal advice. Indemnity and additional insured requirements are limited by state law; have your attorney review your contracts.